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Second Motor Insurance Key Information Report

Targeted News Service (Press Releases)

DUBLIN, Ireland, May 11 -- The Ireland Department of Finance issued the following news release:

Minister of State, with special responsibility for Financial Services and Insurance, Michael D'Arcy T.D., today published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group). The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database. The Report follows up on the first report, published in July 2017.

This Report provides information on overall ultimate claims costs trends from 2011 to 2016 for the main insurance companies operating in the Irish motor insurance market, who are Insurance Ireland members. It sets these out broken down into Third Party Injury ultimate claims costs and Non-Injury ultimate claims costs including claims cost arising from damage, fire and theft, as well as windscreen claims. In addition, it provides details on earned premium income and exposure in the sector for the same years.

Some key findings in the Report include:

* Total claims costs per policy, for all claims types, based on projected ultimate costs, increased by about 2.7 percent per year, or 14 percent over the period from 2011 to 2016. These costs include both the general and special damages elements of compensation as well as associated costs such as legal, medical and other fees.

* Driving this increase is the ultimate costs associated with third party injury claims, which represent 77 percent of the proportion of total ultimate claim cost per policy in 2016, as increase from 68 percent in 2011.

* At the same time, the proportion of total ultimate claim cost per policy arising from non-injury claims (except Windscreen claims) was 29 percent in 2011, falling to 21 percent in 2016. This is primarily as a result of a fall in the frequency of non-injury claims.

* The data also suggests that frequency of third party injury claims in Ireland is lower than in the UK but that the costs associated with those claims, including compensation, legal and other costs, are significantly higher than the same costs in the UK.

Commenting on today's publication Minister D'Arcy noted that,

"This report continues the process to improve data transparency in the motor insurance sector, particularly with regard to identifying trends with regard to the costs and types of claims being made. The information contained in this second report, comes from companies representing approximately 90 percent of the Irish motor insurance market over the period 2011 to 2016, and has never before been published in this way on an aggregate basis across the industry. The series of reports being published by the Department in advance of the establishment of the National Claims Information Database, demonstrate the potential usefulness of the Database in the future. I would like to thank the insurance industry for their willingness to engage constructively on this project and look forward to the next report later this year, as well as progress on the National Claims Information Database legislation."